IFEX Event Linked Futures Maintenance Margin Cut to $500

PRESS RELEASE
January 15 2008

IFEX Event Linked Futures Maintenance Margin Cut to $500

IFEX has reduced the maintenance margin on its US Tropical Wind Event Linked Futures (ELFs) contracts to $500 per $10,000 contract for buyers and sellers. IFEX ELF contracts are traded on the Chicago Climate Futures Exchange

IFEX ELF Maintenance Margin - $500 per contract
Maintenance Margin is the capital required by the Clearing Corporation in order to meet contract price volatility. Maintenance margin is now reduced to $500 per contract which have a notional value of $10,000. Maintenance margin must be posted by both buyers and sellers with the Clearing Corporation which guarantees and clears IFEX ELF contracts. This level of margin will remain in force until June 1 2008 when increased levels of margin will apply during the live hurricane season until Nov 31.
IFEX Event Linked Futures are binary or digital contracts which trigger payments depending on whether insured losses as a result of hurricanes and tropical storms striking the United States exceed certain insurance industry losses.  

Further Refinements Planned
IFEX plans to introduce a margining system for the North Atlantic hurricane season which runs from June 1 to November 31. During this period maintenance margin will be variable and will reflect the increased (or decreased) threat of insured losses being caused by hurricanes or tropical storms. IFEX and the Clearing Corporation are working to develop the margin system and a further announcement can be expected in due course.